Throughout the first half of the 20th century, Nauru was a
"rentier state". Nauru is a phosphate rockisland,
with deposits close to the surface, which allow for simple strip mining operations. This island was a
major exporter of phosphate starting in
1907, when the Pacific Phosphate Company began mining there,
through the formation of the British Phosphate Commission in
1919, and continuing after independence. This gave Nauru back full
control of its minerals under the Nauru Phosphate Corporation,
until the deposits ran out during the 1980s. For this reason, Nauru
briefly boasted the highest per-capita income enjoyed by any
sovereign state in the world during
the late 1960s and early 1970s. When the phosphate reserves were
exhausted, and the environment had been seriously harmed by mining,
the trust established to manage the island's wealth became greatly
reduced in value. To earn income, the government resorted to
unusual measures. In the 1990s, Nauru briefly became a tax haven and illegal money laundering center. From 2001 to 2008,
it accepted aid from the Australian government in exchange for
housing an illegal migrant
detention center that held and processed asylum seekers trying to enter
Australia.

From December 2005 to September 2006, Nauru became partially
isolated from the outside world when Air
Nauru, the only airline with service to
the island, ceased to operate. (The only outside access to Nauru was then by
ocean-going ships.) The airline was able to restart operations
under the name Our Airline with monetary
aid from Taiwan.

History

Nauruan warrior, 1880

Nauru was first inhabited by Micronesian and Polynesian people at
least 3,000 years ago. There were traditionally 12 clans or tribes
on Nauru, which are represented in the 12-pointed star in the
nation's flag. Nauruans traced their
descent on the female side. Naurans practiced
aquaculture - they caught juvenile
ibija fish, acclimatized them to fresh water, and raised
them in the Buada
Lagoon, providing an additional, and more reliable source
of food. The other locally-grow components of their diet
included coconuts and pandanus fruit.

The British sea captain John Fearn, a
whale hunter, became the first Westerner to visit this island in
1798, and he named it "Pleasant Island". From around 1830, Nauruans
had contact with Europeans from whaling ships and traders who
replenished their supplies (such as fresh water) at Nauru. Around
this time, deserters from the ships began to live on the island.
The islanders traded food for alcoholic palm
wine and firearms. The firearms were used during the 10-year
Nauruan Tribal War that began in
1878, and by 1888 had resulted in a reduction of the population of
Nauru from 1400 to 900 people.

Colonial period

Nauru was
annexed by Germany in 1888 and incorporated into Germany's Marshall
Island Protectorate. The Germans called the island
Nawodo or Onawero. The arrival of the Germans ended the war, and
social changes brought about by the war established kings as rulers
of the island. The most widely-known of these was King Auweyida. Christian missionaries from the Gilbert Islands arrived in 1888. The Germans
ruled Nauru for almost three decades. Robert Rasch, a German Trader
who married a native woman, was the first administrator, appointed
in 1890.

Phosphate was discovered on Nauru in 1900 by the prospector
Albert Ellis. The Pacific
Phosphate Company started to exploit the reserves in 1906 by
agreement with Germany. The company exported its first shipment in
1907. In 1914, following the outbreak of World War I, Nauru was captured by Australian
troops. Australia, New Zealand, and the United Kingdom signed the
Nauru Island Agreement in 1919, creating a board known as the
British Phosphate
Commission (BPC). This took over the rights to phosphate
mining.According to the Commonwealth Bureau of Census and
Statistics (now the Australian Bureau of
Statistics), "In common with other natives, the islanders are
very susceptible to tuberculosis and influenza, and in 1921 an
influenza epidemic caused the deaths of 230 islanders." In 1923,
the League of Nations gave
Australia a trustee mandate over Nauru, with the United Kingdom and
New Zealand being co-trustees, also.

World War II

On the 6th and 7th of December, 1940, the German auxiliary cruisers
Komet and
Orion sunk four supply ships in the vicinity of Nauru. On
the next day, Komet shelled Nauru's phosphate mining
areas, oil storage depots, and the shiploading cantilever. The
attacks seriously disrupted phosphate supplies to Australia and New
Zealand (mostly used for munition and fertilizer purposes.)

Japanese troops occupied Nauru
on 26 August 1942. The Japanese troops built an airfield on
Nauru which was bombed for the first time on 25 March 1943,
preventing food supplies from being flown to Nauru. The Japanese deported
1,200 Nauruans to work as laborers in the Chuuk islands. Nauru, which had been bypassed and left to
"wither on the vine" by American forces, was finally set free from
the Japanese on 13 September 1945, when Captain Solda, the
commander of all the Japanese troops on Nauru, surrendered the
island to the Royal Australian Navy and Army. This surrender was
accepted by the brigadier J. R. Stevenson, who represented Lieutenant
General Sturdee, the commander of the First Australian Army, on
board the warship HMAS Diamantina Arrangements were made to repatriate from Chuuk the
737 Nauruans who survived Japanese captivity there. They
were returned to Nauru by the BPC ship Trienza in January
1946. In 1947, a trusteeship was established by the United Nations, and Australia, New Zealand,
and the United Kingdom became the U.N. trustees of the
island.

Independence

Nauru became self-governing in January 1966, and following a
two-year constitutional convention, it became independent in 1968,
led by founding president Hammer
DeRoburt. In 1967, the people of Nauru purchased the assets of
the British Phosphate Commissioners, and in June 1970, control
passed to the locally-owned Nauru Phosphate Corporation.
Income from the exploitation of phosphate gave Nauruans one of the
highest living standards in the Pacific and per capita, in the
world.

In 1989,
Nauru took legal actions against Australia in the International Court of
Justice over Australia's actions during its administration
of Nauru. In particular, Nauru made a legal complaint
against Australia's failure to remedy the environmental damage
caused by phosphate mining. Certain Phosphate Lands: Nauru
v.Australia led to an out-of-court settlement to
rehabilitate the mined-out areas of Nauru.

International Agreements

Politics

Nauru is a republic with a parliamentary system of government. The
president is both the head of state
and of government. An 18-member
unicameral parliament is elected every
three years. The parliament elects a President from its members,
and the President appoints a cabinet of five to six members. Nauru
does not have any formal structure for political parties.
Candidates typically stand for office as independents. Fifteen of
the 18 members of the current Parliament are independents, and
alliances within the government are often formed on the basis of
extended family ties. Three parties that have sometimes been active
in Nauruan politics are the Democratic Party, Nauru First, and the Centre Party.

Current president Marcus Stephen

Nauru parliament

Since 1992, local government has been the responsibility of the
Nauru Island Council (NIC). The NIC has limited powers, and it
functions as an advisor to the national government on local
matters. The role of the NIC is to concentrate its efforts on local
activities relevant to Nauruans. An elected member of the Nauru
Island Council cannot simultaneously be a member of parliament.
Land tenure on Nauru is unusual: all
Nauruans have certain rights to all land on the island, which is
owned by individuals and family groups. Government and corporate
entities do not own any land, and they must enter into a lease
arrangement with the landowners to use land. Non-Nauruans cannot
own land here.

Nauru had 17 changes of administration between 1989 and 2003.
Between 1999 and 2003, a series of no-confidence votes and
elections resulted in two people, René
Harris and Bernard Dowiyogo,
leading the country for alternating periods. Dowiyogo died in
office in March 2003 and Ludwig Scotty
was elected as the President. Scotty was re-elected to serve a full
term in October 2004. Following a vote of "no confidence" by
Parliament against President Scotty on 19 December 2007, Marcus Stephen became the President.

Nauru has a complex legal system. Its Supreme Court, headed by the
Chief Justice, is paramount on constitutional issues. Other cases can
be appealed to the two-judge Appellate Court. Parliament cannot
overturn court decisions, but Appellate Court rulings can be
appealed to the High Court of Australia. However, in practice, this rarely happens.
Lower courts consist of the District Court and the Family Court,
both of which are headed by a Resident Magistrate, who also is the
Registrar of the Supreme Court. Finally, there also are two
quasi-courts: the Public Service Appeal Board and the Police Appeal
Board, both of which are presided over by the Chief Justice.

Nauru with its small population has no armed forces. Under an
informal agreement, its defense is the responsibility of Australia.
There is a small police force under civilian control.

Nauru is divided into fourteen administrative districts which are grouped into eight electoral
constituencies. The districts are:

Nauru and Australia have close diplomatic ties. In addition to the
informal defense arrangements, the September 2005 Memorandum of
Understanding between the two countries provides Nauru with
financial aid and technical assistance, including a Secretary of
Finance to prepare Nauru's budget, and advisers on health and
education. This aid is in return for Nauru's housing of asylum
seekers while their applications for entry into Australia are
processed. Nauru uses the Australian
dollar as its official currency.

Nauru has
used its position as a member of the United Nations to gain
financial support from both the Republic of China (ROC) and the People's Republic of China (PRC) by changing its position on the political status of
Taiwan. During 2002, Nauru signed an agreement to
establish diplomatic relations with the PRC on 21 July. This move
followed Premier Zhu Rongji's promise to
provide more than 60 million American dollars in aid. In response,
the ROC severed diplomatic relations with Nauru two days later.
Nauru later re-established links with the ROC on 14 May 2005, and
diplomatic ties with the PRC were officially severed on 31 May
2005. However, the PRC continues to maintain a diplomatic presence
(a consulate?) on Nauru.

In recent times, a significant portion of Nauru's income has been
in the form of aid from Australia. In 2001, the MV
Tampa, a Norwegian ship that had rescued 433 refugees (from various
countries including Afghanistan) from a stranded 20-meter-long boat and was seeking
to dock in Australia, was diverted to Nauru as part of the Pacific Solution. Nauru operated the
detention center in exchange for Australian aid. By November 2005,
only two refugees, Mohammed Sagar and
Muhammad Faisal, remained on Nauru
from those first sent there in 2001, with Sagar finally resettling
in early 2007. The Australian government sent further groups of
asylum-seekers to Nauru in late 2006 and early 2007. In late
January 2008, following Australia's decision to close the
processing center, Nauru announced that they will request a new aid
deal to ease the resulting blow to the economy.

Geography

Nauru is a small, oval-shaped island in the southwestern Pacific
Ocean, 42 km (26 miles) south of the Equator. The island is surrounded by a coral reef,
which is exposed at low tide and dotted with pinnacles. The reef is
bound seaward by deep water, and on the inside by a sandy beach.
The presence of the reef has prevented the establishment of a
seaport, although 16 artificial channels have been made in the
reef to allow small boats to access the island. A 150 to 300 meter
(about 500 to 1000 ft.) wide fertile coastal strip lies inland
from the beach. Coral cliffs surround Nauru's central plateau,
which is known as "Topside". The highest point of the plateau, called the
Command
Ridge, is 71 meters above sea level. The only
fertile areas on Nauru are the narrow coastal belt, where coconut palms flourish. The land surrounding
Buada
Lagoon supports bananas, pineapples, vegetables, pandanus trees, and indigenous hardwoods
such as the tomano
tree. The population of Nauru is concentrated in the
coastal belt and around Buada Lagoon.

Map of Nauru

Nauru was
one of three great phosphate rock islands in
the Pacific Ocean (the others were Banaba (Ocean
Island) in Kiribati and Makatea in French Polynesia). However, the phosphate reserves on Nauru
are depleted for all practical purposes. Phosphate mining in the
central plateau has left a barren terrain of jagged limestone
pinnacles up to 15 meters (49 ft.) high. A century of mining
has stripped and devastated about 80% of the land area. Mining has
also impacted the surrounding Exclusive Economic Zone, with 40% of
marine life estimated to have been killed by silt and phosphate
runoff.

There are quite limited natural fresh water resources on Nauru.
Rooftop storage tanks collect
rainwater, but the islanders are mostly dependent on a single,
aging desalination plant. Nauru's
climate is hot and very humid year-round—because of the proximity
of the land to the Equator and the ocean.
Nauru is hit by monsoon rains between
November and February. Annual rainfall is highly variable and is
influenced by the El
Niño-Southern Oscillation, with several significant recorded
droughts. The temperature on Nauru ranges between 26 and 35°
Celsius (79 to 95°Fahrenheit) during the day and between 25 and 28°
Celsius (77 to 82°F.) at night . As an island nation, Nauru is
quite vulnerable to climate change
and sea level change, but to what
degree is difficult to predict. At least 80% of the land of Nauru
is well-elevated, but this area will be uninhabitable until the
phosphate mining rehabilitation program is implemented. Also, the
agricultural area of Nauru is quite close to the seashore.

There are only about 60 recorded vascular
plant species native to the island, none of which are endemic. Coconut farming, mining, and
introduced species have caused serious disturbance to the native
vegetation. There are no native land mammals,
but there are native birds, including the endemic Nauru Reed Warbler, insects, and land
crabs. The Polynesian rat, cats,
dogs, pigs, and chickens have been introduced to Nauru from ships,
either accidentally or on purpose.

Economy

An aerial image of Nauru in 2002 from the U.S.

Department of Energy's Atmospheric Radiation Measurement
Program.

Regenerated vegetation covers 63% of land that was
mined.

The Nauruan economy peaked in the early 1980s. Nauru's economy
depended almost entirely on the phosphate deposits that originated
from the droppings of sea birds. There are few other resources, and
most necessities are imported. Small-scale mining is still
conducted by the RONPhos, formerly known as the Nauru Phosphate Corporation. The
government places a percentage of RONPhos's earnings into the
Nauru Phosphate
Royalties Trust. The Trust manages long-term investments,
intended to support the citizens once the phosphate reserves have
been exhausted.

The
Mercure Hotel in Sydney and Nauru House in Melbourne were sold in 2004 to finance debts and Air Nauru's only Boeing
737, which was repossessed in December 2005. Normal air
service resumed after the aircraft was replaced with a Boeing
737-300 airliner in June 2006.

The value of the Trust is estimated to have shrunken from 1,300
million Australian dollars in 1991
to 138 million dollars in 2002. In 2005, the corporation sold its
property asset in Melbourne, the vacant Savoy Tavern site, for $7.5
milliion. Nauru currently lacks money to perform many of the basic
functions of government. For example, the National Bank of Nauru is
insolvent. The CIA World Factbook estimated GDP per capita at
$5,000 in 2005. The Asian Development Bank 2007 economic report on
Nauru estimated GDP per capita at
$2400 to $2715.

There are no personal taxes in Nauru. The unemployment rate is estimated to be 90%, and
the government employs 95% of those Nauruans who work. The Asian Development Bank notes that
although the Administration has a strong public mandate to
implement economic reforms, in the absence of an alternative to
phosphate mining, the medium-term outlook is for continued
dependence on external assistance. The sale of deep-sea fishing
rights to other countries may generate some revenue. Tourism is not
a major contributor to the economy, because there is little to see
or do here, the climate is very unpleasant, and there are few
facilities for tourists. The Menen Hotel and the OD-N-Aiwo Hotel are the only two hotels on the island.

In the 1990s, Nauru became a tax haven and
it offered passports to foreign nationals for a fee. The
inter-governmental Financial Action
Task Force on Money Laundering (FATF) then identified Nauru as
one of 15 "non-cooperative" countries in its fight against money laundering. During the 1990s, it was
possible to establish a licensed bank in Nauru for $25,000, no
questions asked. Under pressure from FATF, Nauru introduced
anti-avoidance legislation in 2003, after which foreign hot money flew out of the country. In October
2005, thanks to this legislation and its effective enforcement,
FATF lifted the non-cooperative designation.

From 2001 to 2007, the Nauru
detention centre provided a source of income for Nauru. The
Nauruan authorities reacted with concern to its closure by
Australia. In February 2008, the Foreign Affairs Minister, Dr.
Kieren Keke, stated that it would result
in 100 Nauruans losing their jobs, and would affect 10% of the
island's population directly or indirectly:

"We have got a huge number of families that are suddenly going
to be without any income. We are looking at ways we can try and
provide some welfare assistance but our capacity to do that is very
limited. Literally we have got a major unemployment crisis in front
of us."

Demographics

Nauru had 9,265 residents at end of 2006. The population was
previously larger, but in 2006 some 1500 people left the island
during a repatriation of immigrant workers from Kiribati and Tuvalu. The
repatriation was motivated by wide-scale reductions-in-force in the
phosphate mining industry. The official language of Nauru is
Nauruan, a distinct Pacific island
language, which is spoken by 96% of ethnic Nauruans at home.
English is widely spoken and it is the language of government and
commerce (Few outside of Nauru speak Nauruan - thus an
international language like English is a necessity.)

Literacy on Nauru is 96%, and education is
compulsory for children from six to 15 years old, and two more
non-compulsory years are offered (years 11 and 12). There is a
campus of the University
of the South Pacific on Nauru. Before this school was built,
eligible students traveled to Australia, New Zealand, etc., for
their college educations.

Nauruans are among the most obese people in
the world. 90% of adults have a higher BMI than the world average. Nauru has the
world's highest level of type 2
diabetes, with more than 40% of the population affected. Other
significant dietary-related problems on Nauru include kidney disease and heart disease. Life expectancy on Nauru in
2006 was just 58.0 years for males and 65.0 years for
females.

Culture

Open air assembly of Nauruans

Nauruans descended from Polynesian and Micronesian seafarers who
believed in a female
deity, Eijebong, and a spirit land, an island called Buitani. Two
of the 12 original tribal groups became extinct in the 20th
century. Angam Day, held on 26 October,
celebrates the recovery of the Nauruan population after the two
World Wars, which together reduced the indigenous population to
fewer than 1500. The displacement of the indigenous culture by
colonial and contemporary, western influences is significant. Few
of the old customs have been preserved, but some forms of
traditional music, arts and crafts, and fishing are still
practiced.

There are no daily news publications on Nauru, but there are
several weekly or fortnightly publications, including the
Bulletin, the Central Star News and The Nauru
Chronicle. There is a state-owned television station, Nauru
Television (NTV), which broadcasts programmes from New Zealand, and
there is a state-owned non-commercial radio station, Radio Nauru,
which carries programs from Radio
Australia and the BBC.

A traditional activity is catching noddy
tern when they return from foraging at sea. At sunset, men
stand on the beach ready to throw their lassos
at the incoming birds. The Nauruan lasso is supple rope with a
weight at the end. When a bird approaches, the lasso is thrown up,
hits or drapes itself over the bird, which falls to the ground. The
unfortunate noddy is then killed, plucked, cleaned, cooked, and
eaten.